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Monday, December 31, 2012

Toyota Settles Class-Action Gas-Pedal Suit

On August 28, 2009, an off-duty California highway
patrolman named Mark Saylor was driving his Lexus (made by Toyota) near Santee,
California with three members of his family.Suddenly the car accelerated to speeds of up to 100 MPH, and
one of the occupants called 911 to report that they were in trouble and the car
“had no brakes.”Seconds later, the
Lexus collided with another vehicle, rolled down an embankment, and caught
fire, killing everyone inside.This was the first highly publicized incident in what came to be known
as Toyota’s gas-pedal problem.

On Mar. 6, 2010, I blogged on what had transpired since
that and other similar sudden-acceleration incidents had come to light with
regard to a variety of Toyota models.By then, Toyota had already been cited by the U. S. National Highway
Traffic Safety Administration (NHTSA) for a letter it sent out to owners about
the problem which the NHTSA said was “misleading.”Toyota later paid a fine to the NHTSA for not notifying the
agency promptly enough when reports of unintended acceleration began to reach
the automaker.

There were at least two main suspected causes of these
incidents.One, which Toyota
admitted and issued massive recall notices to fix, involved a misfit between
the gas pedal and certain floor mats that could catch in the pedal mechanism,
making it difficult or impossible to slow down.The second suspected cause was that glitches in the control
software that interfaces between the gas pedal and the engine were appearing
randomly or in response to unpredictable RF interference, for example.Toyota has insisted all along that
there is no problem with the software.

But now, after a large class-action lawsuit was filed
against the company in California, Toyota has offered a $1-billion settlement
which has yet to be approved by the judge in the case.However, it looks like the worst may be
over for the car company.

The details of how the
settlement breaks down are interesting, to say the least.Apparently to widen the class of harmed
individuals, lawyers in the suit are suing on behalf of anyone who sold or
traded Toyotas between September of 2009 and the end of 2010, presumably because
the resale value of all Toyotas was depressed by the ongoing bad news.Under the proposed settlement, that
particular class is getting $250 million as compensation.Toyota has developed a “brake-override”
system that will evidently guarantee your ability to stop the car even if you
put a brick on the accelerator (which is not recommended in any case).Some Toyotas can’t accommodate this new
system as a retrofit, so owners of those vehicles get up to $125 apiece instead;
the rest get the brake-override system installed free of charge.About $400 million is going for
extended warranties on several components that came under suspicion during the
investigation:tail-light
switches, onboard computers, and so on.And the lawyers, without whom this whole settlement would not have been
possible, get $227 million. Such is justice in today’s world.

Toyota does not admit to
any wrongdoing in the settlement, although it is pretty clear that they have
decided things are amiss enough to spend a billion dollars fixing them.To put this amount in perspective, Toyota’s
total revenues for the year ending March of 2012 was $226 billion.So a billion dollars is not a huge
chunk of their revenues, though it will certainly cut into their profits, which
run a few billion dollars a year when they make money at all.Nevertheless, the financial world
generally looks kindly upon Toyota at this news, because it clears up a good
deal of the uncertainty surrounding the cloud of lawsuits arising from the
acceleration problem.

The
unintended-acceleration problem is a good example of how non-technical factors
begin to enter into a problem once it has entered the public mind.It is possible (though not likely) that
a similar crisis could strike any engineering-intensive business with a large customer
base of non-technical consumers.Rumors do spread, even if they are not founded in fact.One instinctive response that many
engineers might take toward such a situation—the spread of unfounded rumors
about a technical problem—would be simply to state the technical reasons and
results of tests that show the rumor to be false.

If everyone listening were
engineers, this action alone might clear up the issue.But most people, thank God, are not
engineers.And hearing a bunch of
incomprehensible techno-speak will not allay their fears about an unlikely but
graphically grisly possibility of something as awful as dying in a car crash
caused by a runaway accelerator you are helpless to control.After a good bit of fumbling early on,
Toyota’s public relations and legal departments got their acts together and
came up with a settlement that seems to go the extra mile to alleviate not only
the technical problems Toyota itself discovered—the gas-pedal-floormat
interference—but a range of other issues which may or may not be based in
reality:extended warranties for
parts that some people think may be defective, and a new technical fix that
will prevent accidents from unintended acceleration even if the driver does
something stupid like stomping on the gas and the brake at the same time.

And drivers do stupid
things sometimes, no doubt about it.An investigation sponsored by the U. S. government found that most of
the cases of unintended acceleration were due to driver error.This could mean anything from a loose
bottle of shampoo rolling under the gas pedal at the wrong time to a person
freezing stiff-legged in terror as the car roars out of control.But if the new brake-override system
really does its job, Toyotas will have an edge over most other cars that don’t
have it.And a brake-override
system may become standard on all new cars in the future, which would be a
generally good thing, I suppose.

But it’s too bad that the
process took so long, cost so much money, and involved so many lawyers.However, that’s the way things get done
in today’s systems of justice, where problems are always viewed with one eye on
the bottom line.Let’s hope that
automotive engineers of the future, both at Toyota and elsewhere, will pay more
attention to customer complaints and be more proactive when similar safety
problems arise.

Sources:I referred to an article “Toyota in
$1.1 Billion Gas-Pedal Settlement” in the Dec. 27, 2012 online edition of the
Wall Street Journal at